Written Answers. - Shannon Free Zone.

Tony Killeen

Ceist:

115 Mr. Killeen asked the Tánaiste and Minister for Enterprise, Trade and Employment the changes proposed which will impact on the status of the Shannon free zone; if legislation is required; the consequences in terms of incentives, aids and supports currently available to companies operating in the free zone; and if she will make a statement on the matter. [18957/03]

Tony Killeen

Ceist:

116 Mr. Killeen asked the Tánaiste and Minister for Enterprise, Trade and Employment if there are plans to transfer promotion of Shannon free zone from the Shannon Development Company to IDA Ireland; and if she will make a statement on the matter. [18960/03]

I propose to take Questions Nos. 115 and 116 together.

As the Deputy is aware, Shannon Development was established as a regional development agency in 1959: this agency has exclusive statutory responsibility for enterprise development in the area known as the Shannon free zone, a clearly defined geographical area which is set out in the Shannon Free Airport Development Company Acts. No other agency operates in this zone. To enable a company operate in the zone, thereby availing of the specific favourable tax regime that applied to the zone, a specific licence was required under those Acts.
With the introduction of the general nation-wide rate of corporation tax of 12.5% from 1 January 2003, it appears that the licensing system does not offer any additional benefits to the licensees, as had been the case before that date. Thus, my Department and Shannon Development have been in active dialogue on the need for such licences in the future, bearing in mind this Government's policy on the regulatory reform. This dialogue is ongoing and one of the issues that is being discussed is the effect on current operators on the zone. The outcome of this dialogue will have an impact on the future attraction of the zone for inward investment and the promotion thereof. Of course, any change in the requirements would require legislative change but, until there is clarity as to the regulatory requirements in future, there are no proposals to change the relevant legislation at present.
While the issue of assistance to operators on the zone is an operational issue for Shannon Development, and is one in which I have no day-to-day function, it is my understanding that the current dialogue on the licensing regime does not affect this aspect.